Rouge and Encore. Canada gets two new low cost carriers that would cause quite a stir in Australia, for airline managements as well as their customers
Canadian flyers will have two new low cost airlines to consider this northern summer, with the most recently announced, a longer haul international brand for Air Canada being named Rouge overnight.
Rouge will start flying on 1 July. Like WestJet Encore, it is branded to use French titles that are in popular use among English speakers, neatly fitting into the official bilingual policy of Canada and avoiding the need for double titles displayed in alternative dominant submissive combinations in signage.
They could hardly be more different in concept or reach however, and would pose very interesting choices for Australian flyers if they were attempted in this market.
WestJet Encore is based on shorter haul secondary airport flights using a fleet of up to 45 Bombardier Q400 turboprops, fitted with the maximum number of 74 tiny seats that you find in the same aircraft in widespread use by Qantaslink.
Encore makes its debut in mid June. The logic in its route structure and fleet choice is compelling in that Canada has a very large but very widespread market for regional flights and for the coldest half of the year, very, very few people would seriously contemplate travelling around most of the country by anything but air.
WestJet is a well established and profitable low fare carrier based on the Virgin Blue model that has basically eaten Air Canada’s lunch wherever it chose to fly its Boeing 737s, and Virgin Blue’s co-founder Brett Godfrey has been on its board for just over six years.
It seasonally leases a 757-200 to serve some longer international flights to Hawaii, but has its own fleet of around 100 NG series 737s, over a network that extends into the US, Mexico and the Caribbean.
Rouge’s early destinations have been announced as Venice, Edinburgh, and Athens as well as airports in Cuba, the Dominican Republic, Jamaica and Costa Rica. It is launching with two 767-300ERs and two A319s but will grow as fast as Air Canada can take deliveries of Boeing 787s, releasing other jets from its fleet to be rouged.
It will also offer what Canada’s National Post reported as standard coach (economy), enhanced coach and premium coach, but its 767s for example will be packed with around 20% more seats in total than the same jet in Air Canada service.
The Post also said “planes will also be the first in Air Canada’s fleet to use a new wireless in-flight entertainment system. Jets in Rouge’s fleet will stream stored content to personal laptops and other electronic devices.”
An obvious question that may have been asked of Calin Rovinescu, president and CEO, Air Canada, who was in Sydney yesterday, was whether or not his low cost unit, which was named overnight, might fly to Australia.
It obviously could, but will it? Rovinescu was reported as saying Air Canada was interested in a second city in Australia to complement Sydney, with Melbourne a distinct possibility. Air Canada is the only non-stop option to Vancouver from Australia, and is understood to be doing quite well with the route, and it is an airline with an established and respected brand in this country.
One of the interesting things said about air transport in Canada recently came from a financial result briefing by WestJet in which it said that its original 30% cost advantage over Air Canada had been eroded by that carriers internal reforms and was now down to around 10%.
Similar things have been said about low cost carriers in other parts of the world as the surviving ‘legacy’ brands chase operational savings and improved efficiencies, although not yet in Australia.
But there is indirect evidence that both Qantas and Virgin Australia may have reduced significantly their cost base disadvantages compared to Jetstar and Tiger, notwithstanding Virgin’s deliberate lifting of costs where it has chosen to challenge Qantas at the full service end of the spectrum.
How Rouge and WestJet Encore track merits close study from an Australian perspective.